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This Defunct Toy Brand Could Benefit From Toys R Us' Downfall

A defunct toy chain is looking for a new lease on life — and the inventory of Toys R Us may be what puts it back in the game.

This Defunct Toy Brand Could Benefit From Toys R Us' Downfall

Strategic Marks, which owns KB Toys, is considering taking advantage of Toys R Us' bankruptcy by partnering with its toymakers to offer a potential solution regarding where to put the inventory that was originally meant for Toys R Us shelves, CNN reports.

Suppliers like Hasbro Inc. and Mattel have suffered since Toys R Us announced its U.S. liquidation, with shares dropping 3% and nearly 5%, respectively, after the news broke.

KB Toys, which was acquired by Strategic Marks from Bain Capital in 2016, plans to open 1,000 pop-up shops across the U.S. during the next Black Friday and holiday season, offering the toy suppliers a way to recover from sales lost during Toys R Us' downfall, CNN reports. 

KB Toys does not have plans in place to take over vacant Toys R Us leases, but the strategy could prove beneficial for landlords in search of fresh tenants to fill vacancies.

In other news, Deutsche Bank AG analysts report up to 26 Toys R Us stores may now hold little to no value. While the stores were estimated to be worth $618M in 2016, if they were vacated and re-leased, the report said this value would drop by a third due to the ongoing struggles in the retail sector and the risk it represents, Bloomberg reports.